Time Warner Cable (TWC)
Q1 2012 Earnings Call
April 26, 2012 8:30 am ET
Tom Robey -
Glenn A. Britt - Chairman and Chief Executive officer
Robert D. Marcus - President and Chief Operating Officer
Irene M. Esteves - Chief Financial Officer and Executive Vice President
Benjamin Swinburne - Morgan Stanley, Research Division
Jessica Reif Cohen - BofA Merrill Lynch, Research Division
Craig Moffett - Sanford C. Bernstein & Co., LLC., Research Division
Richard Greenfield - BTIG, LLC, Research Division
Jason B. Bazinet - Citigroup Inc, Research Division
Douglas D. Mitchelson - Deutsche Bank AG, Research Division
Marci Ryvicker - Wells Fargo Securities, LLC, Research Division
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Hello, and welcome to Time Warner Cable First Quarter 2012 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Tom Robey, Senior Vice President of Time Warner Cable Investor Relations. Thank you. You may begin.
Thanks, Candy, and good morning, everyone. Welcome to Time Warner Cable's 2012 First Quarter Earnings Conference Call. This morning, we issued a press release detailing our 2012 first quarter results.
Before we begin, there are several items I need to cover. First, we refer to certain non-GAAP measures including operating income before depreciation and amortization or OIBDA. In addition, we refer to adjusted OIBDA, adjusted OIBDA less capital expenditures and adjusted diluted earnings per share. Definitions and schedules setting out reconciliations of these historical non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release and our trending schedules.
Second, today's announcement includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management's current expectations and beliefs and are subject to uncertainty and changes and circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to various factors, including economic, business, competitive, technological, strategic and/or regulatory changes that could affect our business.
These factors are discussed in detail in Time Warner Cable's SEC filings, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q. Time Warner Cable is under no obligation to, and in fact, expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Third, today's comments on our outlook for 2012 do not include the impact of the expected sale of AWS spectrum by SpectrumCo.
And finally, today's press release, trending schedules, presentation slides and related reconciliation schedules are available on our company's website at twc.com/investors. A replay of today's call will be available beginning approximately 2 hours after the call has ended and will run through midnight, Eastern Time, April 30.
With that covered, I'll thank you and turn the call over to Glenn.
Glenn A. Britt
Good morning, and thanks for joining us. Time Warner Cable has built a reputation for steady and predictable performance. And our first quarter results were steady and predictable. Residential broadband and business services were standouts. We grew business services revenue by over 37% on a year-over-year basis on the first quarter primarily through organic expansion and our acquisition of NaviSite last April. This continues to be a terrific opportunity for us. We also continue to be very excited by broadband. We're gaining traction with our efforts to sell broadband Single Plays. We're continuing to see a very favorable mix shift towards higher speeds, and we're taking shares -- share from the telcos. In fact, this quarter, we had more broadband net adds than Verizon and AT&T combined.
When we announced the Insight acquisition last August, we knew that we struck a good deal to buy a superior property. Now that we've closed the transaction and have come into integration, it looks even better than we thought. We're very pleased with the quality of Insight employees, the state of its plants, its reputation in the marketplace and the depth of its customer relationships. We expect that Insight will have a significant positive impact on free cash flow this year.
We reached a notable milestone at the end of March. Since initiation of our share repurchase program 6 quarters ago, we have bought more than 50 million Time Warner Cable shares. Coupled with our dividend, this demonstrates our continued commitment to return capital to our shareholders.
Now I'll turn the call over to Rob and then Irene to dive into the details. Rob?
Robert D. Marcus
Thanks, Glenn, and good morning, everyone. As Glenn said, we're off to good start in 2012. Business services growth continues to accelerate, and residential services were actively pursuing numerous initiatives designed to enhance the value of our products and to improve our performance throughout the customer lifecycle. And this quarter numbers demonstrate our efforts are paying off.
The economic and competitive environment didn't change much in the first quarter. We continue to see aggressive promotions from competitors, and we now estimate that AT&T's U-verse is available in 1/4 of our footprint, and Verizon's FiOS is available at around 11%. This overlap is slightly lower than last quarter due to the acquisition of Insight, which has relatively less overlap with U-verse and none with FiOS.
So perhaps I should start with the Insight acquisition, which closed almost 60 days ago. We're thrilled to have the opportunity to serve Insight's customers in Kentucky, Ohio and Indiana, and we're excited to bring onboard some really terrific and dedicated employees. I would note that with the acquisition, Time Warner Cable now has over 50,000 employees and more than 15 million customer relationships.